Burn rate and runway calculator: are you default alive?

Net burn rate is your total monthly expenses minus your monthly revenue. If you spend $35,000 a month and bring in $12,000, your net burn is $23,000 a month. Gross burn is just the $35,000 of spending.

Divide the cash in the bank by your monthly net burn. With $250,000 and a $23,000 net burn, you have about 10.9 months of runway. This calculator also projects revenue and expense growth month by month, which gives a more realistic answer than the flat formula.

It's a test popularised by Paul Graham. Assume your revenue and expenses keep growing at their current rates. If you reach profitability before your cash runs out, you're default alive. If the cash runs out first, you're default dead and need to grow faster, spend less or raise money.

A common rule of thumb is 18 to 24 months after a fundraise, so you can hit the milestones for the next round without raising in a hurry. Below about six months, fundraising gets harder because investors can see you need the money.

There's no single number. What matters is whether the burn buys growth efficiently and whether you reach profitability or the next round before cash runs out. If the calculator says default dead, the burn is too high for your growth rate.

Three levers: grow revenue faster, cut or delay spending, or raise money. The fastest wins usually come from pricing and retention, because they lift revenue without adding cost.